The State has the legislative competence to levy cess on water use even from flowing rivers for industrial purposes, as confirmed under Article 246 and Section 70 of the Maharashtra Land Revenue Code.

1. This appeal by special leave arises from the judgment of the Division Bench of Bombay High Court passed in Writ Petition No. 1509 of 1981 on November 8, 1989. The primary question is : whether the State legislature has power to levy rates of cess on use of flowing water from the river 'Wana'.

2. The facts are as under. The appellant had installed a mill in the year 1898 and has been drawing water for industrial purpose from the said river by installing water pumps at its bank with the help of artificial contrivance. Under S.70 of the Maharashtra Land Revenue Code , 1966, (for short, 'the Code'), the Government of Maharashtra passed the following Resolution on June 5, 1972 thus :
"In exercise of the power conferred in it by S.70 of the , 1966, the Government is pleased to sanction the following rates for the use of water (the right to which vest in Government and in respect of which no rate is liable under any law in force in any part of the State) for non agriculture purpose.

The Collector or such other officer as may be authorised in that behalf should fix the water rates in accordance with rates sanctioned above.
These orders supersede all the prevalent orders for practice in regard to the quantum or the rates chargeable under S.70 of the , 1966.
These orders were issued with the concurrence of the Finance Department vide in Official reference No. 7041 dated 29th April, 1972."

3. The Tehsildar of Hinganghat on the appellant levied cess in the sum of Rs. 18,348.30 for the period from 1967-68 to 1973-74 on the use of water for industrial purpose. The appellant, feeling aggrieved, filed an application under S.20(2) of the Code before the Sub Divisional Officer, Hinganghat, challenging the demand of cess, dated December 19, 1974, inter alia, contending that he had easementary right to draw flowing water from the river, Wana, uninterruptedly and continuously since he had been so drawing the water for over 70 years; that it had perfected as his prospective right to draw water from the flowing river, and the Government is, therefore, devoid of any power to levy cess on the use of water.

4. The Sub Divisional Officer dismissed the application after considering necessary evidence. The appeal filed by the appellant against the order of the Sub Divisional Officer also was dismissed. The Commissioner, Nagpur dismissed the revision. Thereafter, the appellant after filing unsuccessful revision petition before Revenue Tribunal, filed a writ petition in the High Court. The High Court has found that the Government has power to levy cess on water; the resolution, therefore, passed by the Government under S.70 of the Code is within the legislative competence under Art.246 of the Constitution of India. Accordingly, it upheld the action of the respondent. On leave being granted and a reference having been made to three Judge Bench, the matter has come up before us.

5. Shri Sanghi, learned counsel for the appellant contends that the Code envisages collection of land revenue from agriculturists for use of water for cultivation purpose. Admittedly, the use of water by the appellant, is for industrial purpose. By operation of S.70 read with S.20 of the Code, land revenue is relatable to levy on land of cess on the water used for agricultural purpose. Therefore, the Resolution is clearly illegal. Even if it is construed that the Resolution is valid, the legislature lacks competence to enact law since neither Entry 18 nor Entry 45 or Entry 49 of List are available